Glossary of Terms

Electronic cigarette:  A device which creates a vapor intended for inhalation by electronically heating a liquid solution generally containing nicotine derived from tobacco and flavors.

ENDS:  Electronic Nicotine Delivery Systems.

Excise tax:  An indirect tax levied on a select group of products whose use is generally regarded as harmful to the consumer and/or to others; occasionally referred to as “selective consumption taxes” in contrast to broad based levies such Value Added Taxes (VAT) or a General Sales Tax (GST).

Floor tax:  When a new excise is introduced or the rate of an existing tax is increased, products that have already been released for consumption into the market are ordinarily not subject to the incremental levy. A floor tax, however, extends the scope of the new tax to stock already in the trade. Sometimes called an inventory…

Heated tobacco:  A manufactured tobacco product which delivers a vapor, without combustion of the tobacco mixture.

Indirect tax:  An indirect tax, such as a sales or excise tax, is not paid directly by the consumer; rather it is collected by an intermediary such as a manufacturer, wholesaler or retailer who remits the tax to the government revenue authority. The tax is passed on to the consumer as it is included in the final…

Nicotine-containing liquid:  A liquid solution containing nicotine nearly always derived from tobacco.

Other tobacco products:  A “catch-all” category found in many excise tax laws that groups several heterogeneous products containing tobacco excluding cigarettes.

Tax classification:  The category of goods defined in the tax legislation to which a particular tax rate and base apply.

Tax structure:  Structure indicates how the tax is calculated. A specific tax is a fixed monetary amount per some measurable base such as units or weight. An ad valorem tax is a percentage of some value, such as a retail price or whole price.

Taxable base:  A basis such as price, weight or units to which the tax rate is applied in order to determine the amount of tax to be paid.

Tobacco mixture:  A blend of processed tobacco frequently combined with flavorings and humectants capable of generating a vapor when heated.